Swiss bank UBS AG is taking steps to save its crown jewel, the wealth management business, by boosting compensation for its financial advisers, who have been defecting in droves to competing firms.

In a conference call between branch managers and financial advisers last week, UBS officials promised to increase compensation between 1 and 2 percent for advisers bringing in at least $400,000 in revenue commissions.

The new scheme is expected to take place at the start of 2009.

UBS, which is led by CEO Marcel Rohner, declined to comment, but many say the Swiss bank has been late to join the string of firms upping incentives to retain talent.

UBS’ brokers have been defecting to firms like Morgan Stanley, which has been aggressively recruiting in an effort to build its wealth-management arm. Morgan is promising top producers recruitment packages that double their previous 12 month earnings, said one adviser.

This person also said they’re offering additional incentives to brokers who bring over at least 75 percent of their clientele.

A Morgan Stanley spokesman declined to comment beyond that the firm has been “actively recruiting” and that it pays top producers “an industry standard deal.”

Financial advisers who work for brokerage firms are defecting at unprecedented rates due to the declining value of stock options, which traditionally keep these employees in place.

Advisory is one the few profitable segments for downtrodden financial services companies as baby boomers continue to look for help with retirement.

In addition to Morgan Stanley, Citigroup’s Smith Barney has also raised compensation for top earners in an effort to recruit new talent.